SC to liberalise bond trading rules

KUALA LUMPUR: The Securities Commission (SC) will liberalise its rules to enable greater retail access in the corporate bond and sukuk market in Malaysia by the first quarter of 2018, says the regulator chairman Tan Sri Ranjit Ajit Singh.

"This involves reviewing the primary market issuance processes and disclosure requirements as well as expanding the range of corporate bonds and sukuk offered to retail investors," Ranjit says in his opening remarks at the Synergistic Collaborations by SC (SCxSC) here today.

"The secondary market will also be reviewed to enable the introduction of a 'Seasoning Framework' to facilitate retail access to existing corporate bonds and sukuk that are currently traded in the wholesale market, subject to eligibility requirements," he adds.

To enhance the transparency of the market, the SC in partnership with the industry, have created a centralised bond and sukuk information called the Bond+Sukuk Information Exchange or BIX.

It is an important component of the overall bonds and sukuk market infrastructure and the first of its kind to consolidate price and credit information combined with an advanced search function and other useful tools to help investors make more informed investment decisions and increase greater participation in the bonds and sukuk market, Ranjit said.

The Malaysian bond and sukuk market has achieved significant growth over the past two decades to reach RM1.3 trillion in size today.

It is the third largest market in Asia (relative to GDP) and the world's largest sukuk market.

"However, information on the bond and sukuk market is fragmented across multiple sources and typically only accessible by institutional investors," Ranjit explains.

Out of the RM1.3 trillion universe, the government bond and sukuk market is valued at RM695bil, while the corporate and sukuk market size is RM585bil.

Investors of corporate bonds and bonds are predominantly domestic institutional market (97%).